The overall effect of the Caribbean Basin Economic Recovery Act (CBERA) on the U.S. economy and U.S. consumers continues to be negligible, while the effect on beneficiary countries is small but positive, reports the U.S. International Trade Commission (USITC) in its publication Caribbean Basin Economic Recovery Act: Impact on U.S. Industries and Consumers and on Beneficiary Countries, Twenty-third Report, 2015-16.
The USITC, an independent, nonpartisan, factfinding federal agency, recently issued its 23rd in a series of biennial reports monitoring imports under CBERA. The CBERA program, operative since January 1, 1984, affords preferential tariff treatment to most products of the 17 designated Caribbean countries that received CBERA benefits during the period covered in the report.
The USITC report covers the impact of CBERA, as modified by the Caribbean Basin Trade Partnership Act of 2000 (CBTPA), and the HOPE and HELP Acts, on the United States, with particular emphasis on calendar year 2016. CBERA requires the USITC to prepare a biennial report assessing both the actual and the probable future effect of CBERA on the U.S. economy generally, on U.S. industries, and on U.S. consumers. The report also covers the impact of the preference program on the beneficiary countries. Following are highlights of the 2015-16 report.
- The overall effect of CBERA-exclusive imports (imports that could receive tariff preferences only under CBERA provisions) on the U.S. economy generally and on U.S. industries and consumers continued to be negligible in 2016. The USITC identified one U.S. industry – methanol -- that might have faced negative effects due to competition from CBERA-exclusive imports.
- Imports receiving preferential treatment under CBERA totaled $875.5 million in 2016, a decline of 43.2 percent from $1.5 billion in 2015. The decline was driven primarily by declining imports of energy products, specifically crude petroleum and methanol, from Trinidad and Tobago. Energy products accounted for 39.3 percent of total imports under CBERA in 2016, with Trinidad and Tobago supplying 99.9 percent of energy imports. U.S. imports under CBERA of agricultural products and "other mining and manufacturing products" also declined, but U.S. imports of textiles and apparel increased if imports under the HOPE and HELP Acts are taken into account. Textiles and apparel, supplied mainly by Haiti (not including imports under HOPE/HELP), accounted for 34.9 percent of imports under CBERA in 2016; agricultural products, 14.4 percent; and “other mining and manufacturing products,” 11.4 percent.
- CBERA has encouraged several beneficiary countries to develop niche exports to the United States, including polystyrene from The Bahamas, fruits and fruit juices from Belize, and electronic products from St. Kitts and Nevis.
- The report found that investment for the near-term production and export of CBERA-eligible products is not likely to result in imports that would have a measurable economic impact on the U.S. economy generally and on U.S. producers.
- Exporting CBERA-eligible goods is a challenge for many CBERA beneficiaries because of supply-side constraints, including inadequate infrastructure and an increasing focus on the export of services. However, special CBERA provisions for Haiti have had a strong, positive effect on export earnings and job creation in Haiti's apparel sector.
Caribbean Basin Economic Recovery Act: Impact on U.S. Industries and Consumers and on Beneficiary Countries, Twenty-third Report, 2015-16 (Inv. No. 332-227, USITC Publication 4728, September 2017) is available at https://www.usitc.gov/publications/332/pub4728.pdf.
USITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requestor. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requestor for national security reasons.